China on Wednesday pushed back against media reports alleging the government was banning state employees from using Apple ‘s (AAPL) iPhone at work — news that had sent shares of the Club holding tumbling last week. Even though Wall Street didn’t appear to immediately cheer Beijing’s clarification — Apple stock was down around 1% Wednesday afternoon — the development confirmed the Club’s initial take that the story was likely much ado about nothing. “China has not issued any laws, regulations or policy documents prohibiting the purchase and use of mobile phones from foreign brands such as Apple,” a spokesperson from China’s Ministry of Foreign Affairs said Wednesday. The Wall Street Journal, citing people familiar with the matter, initially reported last Wednesday that Chinese officials at central government agencies were banning workers from using iPhones and other foreign-branded devices. Apple saw $200 billion in market value wiped out over a two-day losing streak last Wednesday and Thursday. Shares stabilized by Friday. We have maintained all along that Apple’s standing as an aspirational brand in China wouldn’t be affected, regardless if the news were true. “A lot of people are taking Apple off the table after a very big run and I’m not one of them,” Jim Cramer said Wednesday. “If it were really bad, then what would happen is they would close the Apple retail stores or the retail stores would have no one in them because they would be fearful of being targeted by the government as individuals. [That] hasn’t happened,” he added. AAPL YTD mountain Apple (AAPL) year-to-date performance Many analysts on Wall Street echoed our sentiments, with Credit Suisse calling the recent market reaction “overblown.” Instead, a greater concern for Apple is the growing competitive threat from China’s Huawei. The Chinese tech giant launched a new smartphone earlier this month, with an initial batch quickly selling out online. Still, Apple remains a formidable player in the Chinese market, given its prices, product quality and closed ecosystem. Apple relies on Chinese consumers for about 19% of total sales. Meanwhile, Apple on Tuesday hosted its annual product-launch event, which has historically triggered a brief retreat in its share price in the immediate days after. The company unveiled the iPhone 15 , along with a slew of incremental updates to the tech giant’s most popular devices. Jim forecasted Wednesday that Apple stock will likely go higher over the next three months, as consumers begin to trade in their older Apple devices for the company’s new offerings. “People get excited that there’s going to be something big [at these events], then it comes out and it’s incremental,” he said, commenting on Wednesday’s stock decline. “Everything’s been incremental since the first iPhone.” (Jim Cramer’s Charitable Trust is long AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Customers line up to enter an Apple store as iPhone 14 series go on sale on September 16, 2022 in Shanghai, China.
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China on Wednesday pushed back against media reports alleging the government was banning state employees from using Apple‘s (AAPL) iPhone at work — news that had sent shares of the Club holding tumbling last week.